The Magic of Logistics? Data and Optimization, feat. Jason Murray, Co-Founder and CEO of Shipium

Shipping is extraordinarily complicated

• Shipium helps businesses by providing the tech behind the complicated processes of shipping to consumers.
• Jason says that shipping is a series of events that needs to be coordinated well to give customers the optimal experience: “Our belief is that coordination should happen with good technology.” - Jason Murray
• Jason had a long career at Amazon in which his career mostly focused on the merger between logistics and technology - eventually leading him to help launch FBA (Fulfillment by Amazon).
• Jason and the other co-founder of Shipium, Mac, both started working at Amazon together in 1999. After leaving Amazon, they both subsequently built similar software stacks for the businesses they were working on in managing their supply chains.
• They reconnected in 2019 and started discussing the idea that there was a gap of missing software in supporting the booming eCommerce industry.
• This gap could be solved by paying someone to do everything for you, but Jason and Mac wanted to solve the problem by building a platform that could enable partners and companies in eCommerce to run their logistics operations efficiently and cost-effectively.

Logistically Speaking

• “Once companies reach a certain size, the physical properties of what they’re shipping become an important part of how the customer experience works and their cost structure overall.” - Jason Murray
• Jason says that once that size threshold is reached, businesses have to find a custom solution to fit their particular needs. Depending on the product and its specific needs, it becomes more cost-effective to build your process yourself which requires software for coordination.
• Companies like Amazon and Walmart are becoming increasingly vertical, owning everything from their warehouses to their 747s. There’s a lot more competition in the smaller business spaces which creates a need for smaller operations like label printing, for instance.
• “Logistics is much more than just the FedEx label you put on your box. It’s the entire linear sequence of making and delivering products. The key insight is that the linear sequence is very different for eCommerce and has its own areas to optimize… The bigger the company is, the more optimizing each link in the chain matters to the success and scale of that business.” - Jason Murray
• Most businesses focus on front end experiences, but it’s actually fulfilling that purchase and everything that happens after a sale that makes customers happy - so optimizing your logistic processes and continuing to improve them over time is recommended.

Shipageddon 2020 and the New Way of the World

• In fairness, networks like UPS and FedEx didn’t have time to plan for the increase in shipping and eCommerce in Q4 - when reviewing capital expenditures in 2020, there was no way of having the hindsight to include a global pandemic in their plan for the year.
• Most carriers have been playing catch up since the beginning of the year: “There’s going to be a bigger supply problem than we’ve seen almost ever because of the combination of the pandemic and the holidays meshing together.” - Jason Murray
• Jason predicts that eCommerce isn’t going to return to its previous levels but will continue to grow much higher than its mean after the holiday season. After the 2008 recession, Amazon took a disproportionate amount of the consumer spending volume into eCommerce and it didn’t subside after—people shifted to eCommerce permanently.
• On the shift into eCommerce in 2020 not being temporary: “[Companies] should think about it as a need to strategically put energy into solving our eCommerce challenges because this is the new way of the world.” - Jason Murray
• Jason predicts that in 2021, we’ll see a lot of growth in local carriers and alternative shipping methods to compete with those that already exist or have not been able to rise to the occasion of growth we’ve seen in 2020.
• On logistics: “I would urge people not to think about it as a cost center, but to think of it as a living, breathing thing that’s part of the growth and dynamics of the business… There are these different stages you go through in all aspects of your business. And logistics and fulfillment and planning are all part of that.” - Jason Murray
• Jason’s prediction for the next 18 months or so: “Companies that were omnichannel and neglecting their eCommerce channels are going to either not survive or they’re going to invest in them - which is going to introduce more competition into the market. Delivery experience will become more and more important because consumers now have multiple options to choose from.” - Jason Murray

Links

• Check out our new report with Gladly: The New DIY
• Check out Shipium

If you have any comments or questions about this episode, you can reach out to us at hello@futurecommerce.fm or any of our social channels. We love hearing from our listeners!